§414D-150 Director conflict of interest.
(a) A conflict of interest transaction is a transaction with the corporation
in which a director of the corporation has a direct or indirect interest. A
conflict of interest transaction is not voidable or the basis for imposing
liability on the director if the transaction was fair at the time it was
entered into or is approved as provided in subsection (b).

(b) A transaction in which a director has a
conflict of interest may be approved if:

(1) In the case of a public benefit corporation, the
transaction is approved by the attorney general, before or after the
transaction is consummated;

(2) The material facts of the transaction and the
director's interest were disclosed or known to the board of directors or a
committee of the board and the transaction was authorized, approved, or
ratified by the board or committee of the board; or

(3) The material facts of the transaction and the
director's interest were disclosed or known to the members and they authorized,
approved, or ratified the transaction.

(c) For purposes of this section, a director
of the corporation has an indirect interest in a transaction if:

(1) Another entity in which the director has a
material interest or in which the director is a general partner is a party to
the transaction; or

(2) Another entity of which the director is a
director, officer, or trustee is a party to the transaction.

(d) For purposes of subsection (b), a conflict
of interest transaction is authorized, approved, or ratified if it receives the
affirmative vote of a majority of the directors either on the board or on the
committee, who have no direct or indirect interest in the transaction; provided
that a transaction may not be authorized, approved, or ratified under this section
by a single director. If a majority of the directors on the board who have no
direct or indirect interest in the transaction vote to authorize, approve, or
ratify the transaction, a quorum is present for the purpose of taking action
under this section. The presence of or a vote cast by a director with a direct
or indirect interest in the transaction does not affect the validity of any
action taken under subsection [(b)(2)]; provided the transaction is otherwise
approved as provided in subsection (b).

(e) For purposes of subsection [(b)(3)], a
conflict of interest transaction is authorized, approved, or ratified by the
members if it receives a majority of the votes entitled to be counted under
this subsection. Votes cast by or voted under the control of a director who
has a direct or indirect interest in the transaction, and votes cast by or
voted under the control of an entity described in subsection (c)(1), may not be
counted in a vote of members to determine whether to authorize, approve, or ratify
a conflict of interest transaction under subsection [(b)(3)]. The vote of
these members, however, is counted in determining whether the transaction is
approved under other sections of this chapter. A majority of the voting power,
whether or not present, that are entitled to be counted in a vote on the
transaction under this subsection constitutes a quorum for the purpose of
taking action under this section.

(f) The articles, the bylaws, or a resolution
of the board may impose additional requirements on conflict of interest
transactions. [L 2001, c 105, pt of §1; am L 2004, c 171, §8]